Intro Mkg Very Interesting
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What is Marketing?? Selling?
Advertising?
Promotions?
Making products available in stores?
Maintaining inventories?
All of the above, plus much more!
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Marketing = ?
Marketing is the process of planning and executing the
conception, pricing, promotion, and distribution of ideas,
goods, services to create exchanges that satisfy individualand organizational goals
American Marketing Association
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Marketing = ?
Marketing management is the art and science of
choosing target markets and getting, keeping, and
growing customers through creating, delivering, and
communicating superior customer value.
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Simple Marketing SystemSimple Marketing System
Industry(a collection
of sellers)
Market(a collection
of Buyers)
Goods/services
Money
Communication
Information
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Who makes a market?
Consumer
Manufacturer (producer)
Retailer (customer)
MARKET
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What is a Market?
A market is:
Place
PeopleDemand
6
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Types of Markets
Marketplace is physical (Brick and Mortar)andMarket space is virtual (Click companies)
Examples !!!!!!!!!!!!!!
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Evolution/History of Mktg1. Exchange concept -
2. Production concept
3. Product concept
4. Sales concept
5. Marketing concept
6. Societal marketing concept
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Marketing = ?
Marketing is the sum of all activities that take you to a sales outlet. After that
sales takes over.
Marketing is all about creating a pull, sales is all about push.
Marketing starts with consumer needs and ends with consumer satisfaction.
Marketing is the most essential function of any business. It is most visibleand dynamic function.
Marketing is responsible for generating and meeting the Demand in the
market.
Marketing creates and sustains competitive capability of an organisation.
Marketing is all about managing the four Ps (also called as marketing mix) product
price
place
promotion
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The Marketing Mix (4Ps of Mktg)
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The 4 Ps & 4Cs
Marketing
Mix
Product
Price Promotion
Place
Customer
Solution
Customer
Cost
Communication
Convenience
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Some more Ps !!!!!
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What does marketerplan in the Ps?
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Pricing is the only mix which generates a turnover for the organisation.Price must support the other elements of the mix which are costs to thecompany . Pricing is difficult and must reflect supply and demand
relationship.
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Also called as marketing channels..
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Place/ Distribution
Manufacturer
Consumer
Manufacturer
Retailer
Consumer
Direct Distribution Indirect Distribution
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Typical Marketing Channels forTypical Marketing Channels for
Consumer ProductsConsumer Products
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Promotion
Promotional Mix
Advertising
PublicRelations
SalesPromotion
Personal
Selling
DirectMail
Internet/E-commerce
A successful product or service means nothing unless the benefit
of such a service can be communicated clearly to the target market.An organisationspromotional mix can consist of:
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Blend of the mix depends upon:
Marketing objectives
Type of product
Target market Market structure
Rivals behaviour
Global issues culture/religion, etc.
Marketing position
Product portfolio Product lifecycle
Boston Matrix
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Difference Between - Sales &
Marketing ?
Difference Between - Sales &
Marketing ?
Salestrying to get the customer to want what the
companyproduces push approach
Marketingtrying to get the company produce what the
customerwants pull approach
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Scope of mktg
What do we market? Goods
Services
Events
Experiences
Personalities
Place
Organizations
Properties Information
Ideas and concepts
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Needs, wantsdemands
Markets Marketing &
Marketers
Utility, Value &Satisfaction
Exchange, Transaction
Relationships
Products
Core Concepts of MarketingCore Concepts of Marketing
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Core Concepts of Marketing- example !Core Concepts of Marketing- example !
Need food ( is a must )
Want Pizza, Burger, French fry's ( translation of a need as
per our experience ) Demand Burger ( translation of a want as per our
willingness and ability to buy )
Desire Have a Burger in a five star hotel
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Marketing Triangle
Customers
CompetitionCompany
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Who is a Customer ??
Anyone who is in the market looking at a product /
service for attention, acquisition, use or consumption
that satisfies a want or a need
CUSTOMER IS . . . . .
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How Do Consumers Choose
Among Products & Services?
How Do Consumers Choose
Among Products & Services?
Value - the value or benefits the customers gain from using the
product versus the cost of obtaining the product.
Satisfaction - Based on a comparison of performance and
expectations.
Performance = Expectations => Satisfaction
Performance > Expectations => Delight
Performance < Expectations => Dissatisfaction
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Customer looks forValueValue = Benefit / Cost
Benefit = FunctionalBenefit + Emotional
BenefitCost = Monetary Cost + Time Cost +
Energy Cost + Psychic Cost
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The Give and Get of Marketing
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Business exist
Create customer value =
SustainabilitySustainability
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The Marketing ProcessThe Marketing Process
Business MissionStatement
Objectives
Situation orSWOT Analysis
Implementation
Evaluation, Control
Target Market Strategy
Marketing Strategy
Product
Promotion
Place/Distribution
Price
Marketing Mix
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SWOT analysis
SWOT analysis is a tool for auditing anorganization and its environment.
It is the first stage of planning and helpsmarketers to focus on key issues. SWOTstandsforstrengths, weaknesses, opportunities, andthreats.
Strengths and weaknesses are internal factors.Opportunities and threats are external factors.
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SWOT analysisstrength could be:
marketing expertise.
A new, innovative productor service.
Location of business.
Quality processes andprocedures.
Any other aspect of biz that
adds value to product orservice.
weakness could be:
Lack of marketingexpertise.
Undifferentiated products
or services (i.e. in relationto competitors).
Location of business.
Poor quality goods or
services. Damaged reputation.
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SWOT
Opportunity could be:
A developing market such asthe Internet.
Mergers, joint ventures orstrategic alliances.
Moving into new marketsegments that offer improvedprofits.
A new international market.
A market vacated by anineffective competitor.
Threat could be:
A new competitor in homemarket.
Price wars withcompetitors.
A competitor has a new,innovative product orservice.
Competitors have superioraccess to channels of
distribution. Taxation is introduced on
product or service.
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Example - Starbucks SWOTAnalysis.
Strengths - Starbucks Corporation is a very profitableorganization, earning in excess of $600 million in 2004.
Weaknesses - Starbucks has a reputation for new productdevelopment and creativity.
Opportunities - New products and services that can beretailed in their cafes, such as Fair Trade products.
Threats - Starbucks are exposed to rises in the cost ofcoffee and dairy products
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Example -Nike
SWOT
Analysis.
Strengths - Nike is a very competitive organization,Nike is strong atresearch and development, Nike is a global brand, Nike has nofactories.
Weaknesses - The organization does have a diversified range ofsports products.
Opportunities - Product development offers Nike manyopportunities, develop products such as sport wear, sunglassesand jewellery - high value items strong global brand recognition.
Threats - Nike is exposed to the international nature of trade, Themarket for sports shoes and garments is very competitive. Easilycopied.
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Business Strategic-PlanningProcess
External environment
(Opportunity &
Threat analysis)
Internal Environment
Strength/ Weakness analysis)
Goal FormulationBusiness Mission
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Strategy FormulationEnvironmentalAnalysis
InternalAnalysisCompetitorCustomerSupplier
RegulatorySocial/ Political
Technology Know-HowManufacturing Know-How
Marketing Know-How
Distribution Know-HowLogistics
Strength & Weaknesses
Identity Core Competencies
Opportunities & Threats
Identify opportunity
Fit internal Competencies with external opportunities
Firm Strategies
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Marketing
Environment
Marketing
Environment
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Why a product like radio declined
and now once again emerging asan entertainment medium ?
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What Were the Drivers of ThisChange ?
Technology ?
Government policy ?
Other media substitutes ?
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Why Market LeadersSuffered ?
HMT vs. Titan
HLL vs. Nirma
Bajaj vs. Honda
Dot.com boom, then bust and now resurgence
Market leadership today cannot be taken for granted.
New and more efficient companies are able to upstage
leaders in a much shorter period.
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What Changed in Marketing
Organize by product units Focus on profitable transactions
Look primarily at financialscorecard Focus on shareholdersMarketing does the marketing Build brands through advertising Focus on customer acquisitionNo customer satisfaction
measurementOver-promise, under-deliver
Organize by customer segments Focus on customer lifetime value
Look also at marketing scorecard Focus on stakeholders Everyone does the marketing Build brands through performance Focus on customer retention Measure customer satisfaction and
retention rate Under-promise, over-deliver
Old Economy New Economy
C dC d
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Challenges
Faces shifting consumer
lifestyles and preferences
for healthier foods.
Low ratings of food andservice quality.
Atmosphere not upscale.
Image is perceived as
being uncultured, uncool,and unclassy byyounger
target markets.
Case studyCase study
McDONALDSMcDONALDS Facing New ChallengesFacing New Challenges
Marketing Initiatives Focus on core competency
of consistent products and
reliable service.
Offers upscale alternativesincluding McCafe and
Bistro Gourmet.
Eliminates supersize,
offers healthier foodoptions, and introduces Go
Active! Adult Happy Meal.
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Marketing Environment
Consists of actors and forces outside theorganization that affect managements ability tobuild and maintain relationships with targetcustomers. Studying the environment allows marketers to take
advantage of opportunities as well as to combat threats.
Marketing intelligence and research are used to collect
information about the environment.
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Marketing Environment
Micro environment:
Companys Internal
Environment or
forces that affect its
ability to serve its
customers.
Normally in controlof the company
Macro environment:
larger societal
forces. beyond the
control of theorganization.
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March 12, 2000 Private & Confidential 52
MICROENVIRONM
ENT
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Actors in the micro environmentinclude:
The company itself
Suppliers
Marketing intermediaries Customers
Competitors
Publics
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The Microenvironment
Suppliers: Provide resources needed to produce goods and
services. Important link in the value delivery system.
Most marketers treat suppliers like partners.
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The Microenvironment
Marketing intermediaries: Help the company to promote, sell, and distribute
its goods to final buyers Resellers
Physical distribution firms
Marketing services agencies
Financial intermediaries
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The Microenvironment
Customers: Five types of markets that purchase a companys
goods and services. Consumer
Business
Reseller
Government International
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The Microenvironment
Competitors: Those who serve a target market with products
and services that are viewed by consumers asbeing reasonable substitutes.
Company must gain strategic advantage againstthese organizations.
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Publics: Any group that has an interest in or impact on an
organization's ability to achieve its objectives.
Financial public Media public
Government public
Citizen-action public
Local public
General public Internal public
The Microenvironment
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March 12, 2000 Private & Confidential 59
MA
CROE
NVIRONME
NT
F i h i b
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Forces in the macro evironment can becategorized as:
Demographic
Economic
Natural
Technological
Political
Cultural
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Demographic Environment
Demographics:The study of human populations in terms of size,density, location, age, gender, race, occupation,and other statistics. Marketers track changing age and family structures,
geographic population shifts, educational characteristics,and population diversity.
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Demographic Environment
The changing age structure of the U.S.population is the single most important
demographic trend. Baby boomers, Generation X, and Generation Y
are the key groups.
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Demographic Environment
Baby Boomers: 78 million born between 1946 and 1964.
Equal 28%
of population. Earn more than 50% of all personal income.
Almost 25% belong to racial or ethnic minority.
Spend a lot on anti-aging products and services.
Are likely to postpone retirement.
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Demographic Environment
Generation X: 45 million born between 1965 and 1976.
Defined by shared experiences: Increasing divorce rates.
More of their mothers employed.
First generation of latchkey kids.
Cynical of frivolous marketing pitches.
Care about the environment.
Prize experience, not acquisition.
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Demographic Environment
Generation Y: 72 million born between 1977 and 1994.
Have large amount of disposable income.
Comfortable with computer technology.
Tend to be impatient and Now-Oriented.
Many product lines targeted at those who arepart of Generation Y: Teen and young adult games
Clothes, furniture, food
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Economic Environment
Changes in Income 1980s consumption
frenzy
1990s squeezedconsumer
2000s valuemarketing
Income Distribution Upper class
Middle class
Working class
Underclass
Consists of factors that affect consumerpurchasing power and spending patterns.
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NaturalE
nv
ironment Involves natural resources that are needed as
inputs by marketers or that are affected bymarketing activities.
Factors include: Shortages of raw materials.
Increased pollution.
Increased government intervention.
Environmentally sustainable strategies.
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Technological Environment
Most dramatic force shaping our destiny.
Changes rapidly.
Creates new markets and opportunities.
Challenge is to make practical, affordableproducts.
Safety regulations result in higher research costs
and longer time between conceptualization andintroduction of product.
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Political Environment
Includes laws, government agencies, andpressure groups that influence or limit variousorganizations and individuals in a given society.
Areas of concern: Increasing legislation.
Changing government agency enforcement.
Increased emphasis on ethics and socially responsible
behavior.
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Cultural Environment
The institutions and other forces that affect asocietys basic values, perceptions, preference,and behaviors. Core beliefs and values are passed on from parents to
children and are reinforced by schools, churches,business, and government.
Secondary beliefs and values are more open to change.
Marketers may be able to change secondary beliefs, butNOT core beliefs.
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CulturalE
nv
ironment Societys major cultural views are
expressed in peoples views of:
Themselves Others
Organizations
Society
Nature
The universe
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S
ocio cultural issues! What is the dominant religion?
What are attitudes to foreign products and services?
Does language impact upon the diffusion of products ontomarkets?
How much time do consumers have for leisure?
What are the roles of men and women within society?
How long are the population living? Are the older generationswealthy?
Do the population have a strong/weak opinion on greenissues?
Beliefs in a society
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Describe the environmental forces that affect thecompanys ability to serve its customers.
Explain how changes in the demographic and economicenvironments affect marketing decisions.
Identify the major trends in the firms natural andtechnological environments.
Explain the key changes in the political and culturalenvironments.
Discuss how companies can react to the marketingenvironment.
Questions for discussion
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Challenges of marketing in the 21st
century
Outsourcing
Alliances
E-commerce increasing global competition/Globalization
Technological innovations
Fast changing consumer preferences Decentralization
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Challenges of marketing in the 21st
century
need for integrated marketing
Customization
Need to build customer database Customer retention
Brand building through performance
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